Department of Commerce, Community, and Economic Development

Transcription

1 Department of Commerce, Community, and Economic Development DIVISION OF COMMUNITY AND REGIONAL AFFAIRS P.O. Box Juneau, Alaska Main: Programs fax: September 25, 2013 Mr. Paul Charles, President Newtok Traditional Council P. O. Box 5502 Newtok, Alaska Dear Mr. Charles: By way of this letter I would like to introduce myself. My name is Tom Sutton and I am the Internal Auditor for the Division of Community and Regional Affairs. I have recently completed two audit reports on the Newtok Traditional Council s (NTC) administration of two grants for the construction of the Mertarvik Evacuation Center. With correspondence dated March 1, 2013 (copy enclosed) the previous tribal administrator Mr. Stanley Tom was informed of the intentions of the Division to audit the activities and financial transactions of the following State grants: Grant Project Award Award Remaining Number Title Amount Dec. 31, DC-559 Newtok Shelter & Road $ 4,000,000 $ 427, DC-550 Metarvik Shelter & Road $ 2,500,000 $ 1,571,557 The purpose of this memorandum is two-fold. First, I must ask the NTC to review the audit reports and respond in writing to the audit report s, findings and recommendations. Secondly, in separate correspondence please describe the current status of the required State Single Audits for calendar years ending 2011 and Audit Report Findings and Recommendations The audit results are finalized in two reports. The first part is focused on the NTC s fiscal compliance with certain grant agreement terms and conditions. The second part is a performance report concentrating on the economy, efficiency and effectiveness of NTC to meet the objective of the funded project. Your comments on the audit recommendations in the two reports will be included in both final reports as, Newtok Traditional Council s Responses to Audit Findings. To facilitate the issuance of the final reports, please forward your responses to my physical address or by October 14, 2013.

2 DCRA - Letter to Mr. Paul Charles September 25, 2013 State Single Audit for Years 2011 and 2012 Earlier this year, I met with NTC s external auditor Ms. Lisa Taylor, CPA. At that time Ms. Taylor was working on completing NTC s Federal and State Single Audits for fiscal years ending 2011 and The single audit engagement by Ms. Taylor was in response to the State Division of Finance s notice titled, FY11 State Single Audit Overdue Final Request. This notice is dated April 30, 2013 and is attached for your review. Because of the failure to respond with a Single Audit Report by the previous letter s due date, the Division of Finance issued another letter titled, FY11 State Single Audit Noncompliance Declaration. A copy of this letter is enclosed for your review. The originator of both letters Director Scot Archart wrote in the latter correspondence: I am also asking that all state agencies consider you failure to comply with the provisions of the State Single Audit Act before entering into any further grant agreements with your organization. I strongly urge you to take the necessary steps to come into compliance. In May of this year, Mr. Stanley Tom indicated the Single Audit Reports had not been completed. By way of this letter, I would like to ask the NTC to respond in a separate correspondence and declare the current status of the single audit reports for 2011 and If the audit reports are not completed please describe in the correspondence the plan of action to bring audit reporting up-to-date. Please forward your response to my physical address or by October 14, At this time, I would like to convey my thanks to the former council members and Mr. Stanley Tom s kind assistance and cooperation relative to the engagement of this audit. If you have any questions, please do not hesitate to contact me by phone at or through at Tom.Sutton@alaska.gov. Sincerely, Tom Sutton Thomas L Sutton, CPA Internal Auditor Dept. of Commerce, Community, and Economic Development Division of Community and Regional Affairs P.O. Box Juneau, Alaska Cc: George Carl, Vice President Simeon Fairbanks Jr., Secretary Katherine Charles, Treasurer Louie Andy, Member 2

3 DCRA - Letter to Mr. Paul Charles September 25, 2013 Lisa Charles, Member Bernice John, Member Scott Ruby, Director Janet Davis, Grants Manager Debi Kruse, Grant Administrator III Rachel Spicer, Grant Administrator II Attach: Correspondence Audit Engagement Letter to Mr. Stanley Tom dated March 1, Correspondence Division of Finance s Single Audit Overdue Final Request, dated April 30, Correspondence Division of Finance s Single Audit Noncompliance Declaration, dated June 24,

4 Department of Commerce, Community, and Economic Development DIVISION OF COMMUNITY AND REGIONAL AFFAIRS 550 West Seventh Avenue, Suite 1640 Anchorage, Alaska Main: / Programs fax: March 1, 2013 Stanley Tom--Tribal Administrator Newtok Traditional Council P.O. Box 5545 Newtok, Alaska Dear Mr. Tom: Our grant agreement with Newtok Traditional Council allows for full access and inspection of pertinent records and financial books. This provision is found in Article 5 or Attachment C Access to Records in the grant agreement. The Division of Community and Regional Affairs has identified the following grants for review and to audit the activities and financial transactions: Grant Project Award Award Grant Number Title Amount Remaining Status 11-DC- 559 Newtok Shelter & Road $ 4,000,000 $ 427,378 Active 12-DC- 550 Metarvik Shelter & Road $ 2,500,000 $ 1,571,557 Active The objectives of this audit are to determine: The reliability and integrity of financial and operational information, Compliance with laws, regulations, grant contract provisions and project scope, The safeguarding of assets, and Effectiveness and efficiency of project operations. We would like to start within the next two weeks, provided that you, council members and key personnel are available. The Division s internal auditor is Tom Sutton. Tom is located in our Juneau office. His contact information is: Tom Sutton, CPA Tel. (907) tom.sutton@alaska.gov

5 Letter to Mr. Stanley Tom March 1, 2013 Page Two To start the audit, our auditor will call you to discuss the audit objectives and solicit your input. Our goal is to perform an effective and efficient audit. Following the introduction, Tom will interview key personnel involved with the implementation of your important projects. At some point, we will need your staff to provide us access to the following documents and financial records: 1. Financial Statements, General Ledger, Subsidiary Ledgers for Years , 2. Procurement Contracts and Construction Progress Reports and, 3. Financial Data (i.e. invoices, canceled checks & accounting records) supporting the Council s Request for Reimbursement Form which is submitted to the Division. Additional records or computer systems may need to be reviewed, based upon the initial interviews and the review of the above documents. After Tom completes his review of your records, an exit conference will be held with you to discuss: preliminary findings, any outstanding information and the next steps of the audit. A draft audit report will be completed by the auditor and the draft audit report will be sent to you for your review. We will allow two weeks for a response prior to finalizing the audit. The final report will be sent to you and made available to any requesting agencies or individuals. Our mission is to help your organization achieve the grant project objectives by providing you information about the effectiveness of accounting internal controls and project management. There may be management recommendations which would improve performance or enhance your organization s abilities. If you have any questions about this audit, please do not hesitate to call me at or scott.ruby@alaska.gov. Sincerely, Scott Ruby, Director Division of Community and Regional Affairs Cc: Tom Sutton, Internal Auditor Rachel Spicer, Grant Administrator II Debi Kruse, Grant Administrator III

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